-  This bill is not active in this session.
  •  Summary 
  •  Actions 
  •  Committee Votes 
  •  Floor Votes 
  •  Memo 
  •  Text 
  •  LFIN 
  •  Chamber Video/Transcript 

A01893 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: An act to amend the labor law, in relation to wage theft   PURPOSE OR GENERAL IDEA OF BILL: : To clarify that Article 6 of New York's Labor Law prohibits wage theft without exception.   SUMMARY OF PROVISIONS: Section 1 of the bill outlines the legislature's finding that different sections of Article 6 of New York's Labor Law must be amended to clarify that wage theft remains illegal without exception. Section 2 establishes that this act shall be known as the "No Wage Theft Loophole Act." Section 3 provides that there is no exception to liabil- ity under Section 193 of the Labor Law for failure to pay wages. Section 4 provides that there is no exception to liability under Section 198 of the Labor Law for failure to pay wages, benefits or wage supplements. Section 5 provides that this act shall take effect immediately.   JUSTIFICATION: Article 6 of the Labor Law was created to prevent employers from bene- fitting from the fruits of their employees' labor by withholding wages. If interpreted correctly, this broad-ranging statute allows prevailing plaintiffs to recover unpaid wages, attorney's fees, and in many cases liquidated damages. To the detriment of employees everywhere, however, the statute is often interpreted extremely narrowly by courts who misconstrue or overlook its rights-affirming language. Section 193 of the Labor Law prohibits any deductions from wages unless the deduction is expressly authorized by the employee in writing and for his or her own benefit. While this language seems clear enough on its face to ward against any wage theft, much confusion has arisen over the term "deduction" and what this could possibly represent. For many of us, "deduction" calls to mind a literal notation on a paystub of wages subtracted, which leads to the question: what if the wage theft is not denoted by a line on a paystub? One can imagine a whole host of scenarios, for example, which clearly violate the intent of Section 193 without conforming to this narrow definition of a "deduction." An employer could withhold wages but simply fail to note the deduction on a paystub, for example. Alternatively, an employ- er could deny the existence of the full amount of wages owed and claim that the employee's paycheck that month was a discretionary amount that the employer decided based on the quality of the employee's work. Or, an employer could choose to withhold the pay entirely, as the statute simply prohibits "ANY" deduction. But does "any" mean "all"? What if the statute does not prohibit the withholding of an entire paycheck? While it may seem obvious that a "deduction" in the context of wage theft is meant to imply the taking of wages, case law on the provisions of Article 6 has painted a much more nuanced and confusing picture. In Gottlieb v. Kenneth D. Laub & Co, for example, the Court of Appeals concluded that Section 198, the part of the Labor Law dealing with penalties and recovery actions, was not "substantive." Because of this court ruling, the legislature then amended Section 198 as part of the Unpaid Wages Prohibition Act in 1997 to declare that "all employees shall have the right to recover full wages, benefits and wage supple- ments accrued during the six years previous to the commencing of such action." While it seems the meaning of this provision could hardly be plainer, there was then a later court decision (Malinowski v. Wall Street Source, Inc.) which confused the issue further. The court in Malinowski cited Gottlieb in its ruling, believing that the current language of Section 198 was in place at the time of the Gottlieb ruling and thus did not really mean anything. The court failed to realize that the rights-af- firming language of Section 198 was added post-Gottlieb precisely BECAUSE of Gottlieb. Subsequent courts have ruled in similar ways to reinforce the misled notion that Section 198 does not uphold the right of recovery for full wages. New York's Labor Law, then, which should be a model for the rest of the nation in its defense of employee rights, finds itself watered down by a judicially created loophole. It is thus necessary for the legislature to close this judicially-creat- ed loophole once and for all to clarify that employees must be paid what they are owed, no matter what. Doing so will help defend the rights of all employees, including low-income employees who are more likely to be subject to wage theft. New York cannot in good faith claim to be one of the most progressive states in the nation when it comes to labor rights if we fail to clarify that wage theft is, and has always been, complete- ly prohibited within our boundaries.   PRIOR LEGISLATIVE HISTORY: 2020: A.7841 - referred to labor   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: This act shall take effect immediately.
Go to top